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Saturday, February 28, 2009

Toll hike is now off

The deferred toll hike, maybe due to the incoming by-election which is around the corner. The cabinet, not the works minister himself, unanimously decided in the past 3 weeks meeting to increase the toll, but without any guilty feeling, retract the decision. What a shame to a flip-flop government which is about to sink now.......

Taken from Malaysian Insider:

KUALA LUMPUR, Feb 27 — In what is an embarrassing flip-flop, the federal government said today the increase in road toll on five major highways has been deferred till the end of the year.

Instead, taxpayers will have to fund RM287 million in compensation for concession holders.

The Cabinet decided on the turnaround today, just one day after announcing the hike, citing negative public reaction and the economy.

The decision to drop the rate increase for now appears to suggest the Barisan Nasional (BN) government is concerned with how public reaction could be disastrous for the coalition in the upcoming by-elections.

Works Minister Datuk Seri Mohd Zin Mohamed said today the Cabinet had decided to defer the hike because of the gloomy economic outlook.

“There was negative public reaction.

“As a result, the Cabinet decided to postpone the toll hike till the end of the year,” he told a press conference here today.

But the deferment will still cost tax-payers as the government will now have to pay compensation to the concession holders from public funds.

The government is contractually obligated to compensate concession holders if toll rates are not increased according to a specified schedule.

Toll charges were supposed to have gone up last year but were deferred until this Sunday.

The Government will now have to pay out an additional RM287mil to the concessionaires.

Mohd Zin said RM245mil had already been paid to PLUS, Akleh and Sprint for the scheduled hike that did not happen last January.

The toll hike that was supposed to take effect this Sunday came under heavy criticism from BN and Pakatan Rakyat lawmakers.

With crucial by-elections to face and its hands full trying to manage the economic situation, the BN government had little choice but to cave in to public demands for the toll hikes to be deferred.

But the compensation payments is still likely to draw criticisms as it involves taxpayers’ money, and will be look upon as an example of how previous BN administrations had been too cosy with businessmen.